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Five Lessons in Improving Customer Services from my 10 Years in Startups

Todd Waren, MD, Divergent Ventures

Five Lessons in Improving Customer Services from my 10 Years in StartupsTodd Waren, MD, Divergent Ventures

Ten years ago, I left Microsoft, and began teaching a startup course at Northwestern. Because of that, I caught the startup bug and joined Divergent Ventures, where I have been investing since 2010. Here are Five Lessons about serving customers I have learned. It’s now easier than ever to get hard data but still no substitute for getting out of the building and talking face to face with customers.

Cultivate your Influencers to build an authentic following 

Most people on the planet are now connected to social media. This has raised tremendous opportunities for brands to gather feedback from their “super users” and to use those users to build buzz. Much is made of the ‘big name’ influencers with tens of thousands of followers; but it is important for brands to look at those that are authentically focused on your product. This why Divergent first invested in ReadyPulse— now part of ExpertVoice. ExpertVoice helps brands find their advocates—from that salesperson you depend on to recommend the best ski goggles, to that super user you follow because of their enthusiasm for gear. Tools like ExpertVoice provide a terrific way for companies to listen to their customers and get the word out. Brands should be looking at a specific strategy of engaging their influencers and advocates.

It’s easier than ever to understand market sizes and customer personas 

Great organizations have a crisp view of who their customer is. Startups have the challenge of finding first customers.

Before the internet, understanding how products were used was hard. We relied on surveys or the one-way mirror. Connected internet products change that

The tools for both are better than ever. Eric Ries’ definition of Minimum Viable Product codified the testing of customer uncertainty; and tools on the web have made this easy. Whether it’s getting gross market sizes using Google’s AdWords tools; or running landing page tests with Facebook ads; teams can throw something against the internet to see if somebody cares. Additionally, there is more data available. This is why we invested in PushSpring. As a former product manager, PushSpring is terrific. It breaks down the world of mobile users into personas and sees what customers and potential customers are interested in.

The ability to manage and monitor customer engagement provides great opportunities to improve customer happiness 

Before the internet, understanding how products were used was hard. We relied on surveys or the one-way mirror. Connected internet products change that. We can see which features go unused, and whether customers try and abandon the product. We can even A/B test to deploy two versions of a feature and see which performs better. Couple this ability to monitor and analyze the aggregate data over time with artificial intelligence and machine learning, and we can measure and respond to customer happiness and engagement. One thing I’ve learned is that measurement is particular to each industry and product. It is the reason I’m excited about Divergent’s investment Wicket Labs. Wicket provides customer insights for subscription video services. Using Wicket, a service can monitor customer happiness; understand whether they are focused on a subset of content or the whole catalog; and it lets channels engage with customers to improve retention and decrease churn. 

Because Wicket works across their customers, they can understand the aggregates that work, and provide a depth of offering that no single data science team could do on their own. 

IoT is providing new opportunities to bring internet data to the physical world. 

When I was working on embedded devices at Microsoft in the early 2000’s, we had a belief that most things would be connected, but what has happened is beyond what I imagined. An early bet we made at Divergent was on Tempo.IQ to help customers track timeseries data from the internet of things. While Tempo was ultimately unsuccessful, I saw a glimpse at the connected world— think Wilson’s connected basketball. The IoT also provides a way to understand customer engagement in the physical world. I teach with serial entrepreneur Rich Padula, who has incubated Encurate. Encurate helps museums move beyond audio guides, to harness mobile phones and beacon technology so museum goers have a rich experience. It helps curators and museum administrators understand how exhibits are experienced.

There still is no substitute for “Getting out of the Building”

Measuring and communicating digitally with customers is great; but what I have seen is that there is no substitute for—and no truth for teams—until as Steve Blank says, “they get out of the building to talk face to face.” Of the approximate 80 teams we have had go through NUvention web, and in comparing notes with pioneers of lean launchpad like Jerry Engel, we know that the best teams develop insight when talking to 100 or more customers; and teams need to talk to at least 30 to start building basic insight into what needs to be done.

Technology has made it easier for us to build better products. I’m hopeful technologies will be used ethically and responsibly. Measure with technology, but don’t forget to get out of the building!

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